Current RI Legislative Update

September 2021 RI Legislative Update

RI Legislative Update

Lifespan – Care New England Merger
There may be no story in Rhode Island right now with a bigger gap between the potential consequences and the amount of public attention it’s getting than the Lifespan-Care New England hospital merger. This week’s announcement that state regulators will decide whether to approve the merger by March 16 should focus minds. Will Rhode Island and its residents be better off with roughly 80% of hospital services controlled by a single powerful entity? The hospitals and Brown University say yes, arguing a single integrated academic medical center will improve health outcomes, spur economic development, and help Rhode Island compete with Boston. Others disagree, warning an institution so large would be effectively uncontrollable, or citing studies that question the payoffs from big medical mergers elsewhere.
The Rhode Island Foundation convened a 25-member committee that has now offered some ideas for managing those risks in a new report which will likely help shape the debate over the coming months. One thing that’s changed since early in the pandemic: Lifespan and Care New England are in much better financial shape. Neither hospital group has reported its full-year earnings for fiscal 2022 yet — they follow the federal fiscal year, closing out on Sept. 30, and it takes a few months after that for the numbers to arrive. But through the first nine months of the fiscal year, Lifespan’s operating income stood at $71 million and Care New England’s stood at $41 million. The improved cash flow is due in part to the significant taxpayer support that has been directed the hospitals’ way amid the public health crisis: Lifespan booked $93 million in relief money during the first nine months of the fiscal year, and Care New England booked $77 million. As for Brown University, its endowment just hit a record $6.9 billion.
RI Race for Governor
Nellie Gorbea’s campaign is out with a polling memo that summarizes an internal survey of 500 likely Democratic primary voters conducted from Nov. 7 to 9. The poll puts the secretary of state neck and neck with the incumbent governor: Dan McKee leads at 26%, followed closely by Gorbea at 24%, then Seth Magaziner at 16%, Matt Brown at 6% and Helena Foulkes at 4%; one in five voters is undecided. The memo, co-authored by Gorbea pollster Celinda Lake, says that was the initial result before testing positive messages about each candidate. Once voters heard those messages, Gorbea rose to 29%, followed by McKee at 21%, Magaziner at 19%, Brown at 9% and Foulkes at 6%. Also interesting are the poll’s approval ratings for the three statewide officeholders: Gorbea’s job performance is rated excellent/good by 58% of primary voters, with Magaziner at 55% and McKee at 45%. Personal ratings: Gorbea is at 53% favorable, with Magaziner and McKee tied at 50%.
Right now Dan McKee is employing his own “Rose Garden Strategy”, holding plenty of official gubernatorial events while working to remain above the fray as his challengers launch their campaigns. Evidence emerged this week that the strategy is working: a new Morning Consult poll pegs McKee’s job approval rating at 59%, making him the second most popular Democratic governor in the country, behind only next-door neighbor Ned Lamont at 64%. While there have always been quibbles about Morning Consult’s methodology, an apples-to-apples comparison shows McKee is currently polling 24 points better than Gina Raimondo’s final pre-pandemic number from the same firm. McKee spokesperson Mike Trainor tells me the governor plans to kick off his campaign in late January, and is planning a fundraiser for the same day that he expects to bring in about $300,000.
Seth Magaziner kicked off a fresh debate among the Democratic gubernatorial candidates this week by proposing they sign a so-called “People’s Pledge” designed to neutralize outside money that might otherwise come into the race. The model would be a pledge agreed to in 2014 by Gina Raimondo, Angel Taveras and Clay Pell, which Common Cause’s John Marion says largely succeeded in its goal. “I think that we, as Democrats, should be honest about the fact that we are not powerless to do something about dark money and its corrupting influence on elections,” Magaziner said on this week’s Newsmakers. Matt Brown quickly ridiculed the idea, calling it “an empty, ineffective, and unenforceable gimmick,” and suggesting the other candidates should adopt his policy of refusing donations from corporate PACs, corporations lobbyists,and fossil-fuel interests. (Magaziner said he was open to such bans as part of a negotiated People’s Pledge.)
Nellie Gorbea responded in her own letter, expressing openness to negotiations but using the opportunity to highlight the fact Magaziner loaned his campaign account $700,000 back when he was first running for treasurer and has never paid it back — a frequently talking point from Magaziner’s critics.
RI’s Current and Future Financial Position
A few months before the pandemic, in November 2019, the state’s first-quarter budget report showed Rhode Island on track to run a $4 million deficit for the year. That wasn’t unusual: it was the fourth November out of the previous five when the quarterly budget report showed a projected deficit, the biggest being a $60 million shortfall in 2017. That context is crucial to understand why the $618 million surplus forecast this week is such an eye-popping number to close observers of the budget — it’s not just a lot of money, period, it’s also an enormous swing compared with what lawmakers expected when they wrote the budget in June. That means state leaders have $618 million to spend on top of unspent American Rescue Plan Act funding — not only the much-discussed $1.1 billion ARPA pot, but also hundreds of millions more from ARPA allocated to specific agencies and purposes.
Then there’s the new infrastructure bill, with over $3 billion coming to Rhode Island, and potentially the Build Back Better Act, as well. At the risk of sounding like a broken record, state lawmakers face a huge test in allocating such an enormous one-time windfall wisely.
More federal funds on the way to Rhode Island: U.S. Sen. Jack Reed and his congressional colleagues announced this week they’ve secured an $81.7 million grant from the CDC to pay for the new state health lab. That project has been on the drawing board for a while, but the expectation had been the state would need to use its own resources to fund it. (In practice that might have just meant using other federal money, but that cash is now freed up for other projects.)
Along with most other states in the country, Rhode Island is seeing infections rise yet again heading into the Thanksgiving holiday. The good news is that the state is reporting only about half as many cases – 441 on average per day – compared to the same time last year. The bad news is that health experts, including former FDA commissioner Dr. Scott Gottlieb, have taken to calling COVID-19 an ‘endemic’ similar to the flu, meaning the cyclical ups and downs of infections are likely sticking around for the foreseeable future. Weekly case rates are consistently three to 14 times higher among people who are unvaccinated. But rates are also creeping up among people who have gotten their shots, which is part of why health officials are urging everyone 18 years and older to get a booster. Health Department Director Dr. Nicole Alexander-Scott is calling on Rhode Islanders to ‘keep your guards up’ heading into the colder weather and holiday season.”